A Forest of Forks: What’s the Current State of the Titano/Safuu Inspired Forks?
Following the Wonderland protocol saga where many DeFi users notably suffered a loss, we started searching the cryptosphere for the best working idea which was sound and backed by a reliable team who followed through with what they promised.
As it turns out, most of the protocols offering jaw-dropping APYs — the kind that would leave most degenerative types blushing — were either a deliberate money-grab, or simply failed due to poor tokenomics. Very little testing and thought had been put into their offerings.
To date, the website Titanoforks.com displays 187 Titano / Safuu based forks. Whether the code was re-written or not, any token which involved Auto-Staking and Auto-Compounding has been included on the list. 36 out of 187 tokens (or roughly 20%) have met their fate with an RIP sign, meaning they’re dead and buried. That leaves 74 active projects and 77 launching soon, (well, make that 78 because GuilderFi is about to join this shit-show).
Either way, with project launchpads and custom token-generators popping up faster than you can keep track, “the dream” is suddenly alive for so many to have their own shot at crypto glory and riches. So the space became crowded real quick:
These are four randomly chosen projects on the titanoforks.com website, showing similar patterns in the token price from launch. We can only arrive at the following assumptions about what has actually happened here:
1. Ill-timed launches that failed to gain enough traction from the start, with the resulting selling pressure overwhelming the ability of buyers to support the price above any reasonable level;
2. Deliberate rug-pulls/money-grabs;
3. Insufficient starting liquidity, which was unable to recover;
4. Dysfunctional tokenomics, where the proposed values were not properly tested.
In our own pursuit of happiness, and to get to the bottom of what really made Titano and Safuu so successful, we decided to take a deeper look at the two projects. Could we pick apart the pieces to understand the mechanics?
Titano
When Titano launched in late 2021, it was a considered a revolution in DeFi which drove most of the DeFi 2.0 evolution. Titano introduced mechanisms which would deliver simplicity for the user requiring zero active interaction. Sounds like a pretty cool idea, right?
- Risk Free Value (RFV)
One of the great metrics most likely introduced by Titano was something called the Risk Free Value (RFV). According to Titano, the RFV is a ‘separate wallet’ in Titano’s TAP system. It’s supposed to support and stabilise the liquidity pool in the event of a sharp sell-off that might drain a liquidity pool. This value is supposed to indicate the amount at which their TITANO tokens are backed by real crypto reserves to maintain the full intrinsic value of Titano tokens.
That’s all good but this Treasury fund is simply a hot wallet being controlled by one or however many persons. How could this be? It almost sounds too good to be true. For one person or team to be given the privilege to control the funds within this treasury at their own discretion? We believed that there was something fundamentally wrong with this, so we picked up the first flaw which could be improved upon in the development of the ultimate high APY protocol. So first problem was solved.
- Entering Unchartered Waters
While the concept of Auto-Staking and in particular, Hyper-Auto-Compounding is still very new, it’s our view (based on our research into mostly failed protocols) that the idea and concept may still be in its infancy. This is especially so when you view the many “forks” which tend to follow a similar price trajectory following the launch. Here’s a list of four random “forks” with hyper-aggressive APY’s in excess of 300,000% (as in the case of Safuu) all the way up to 1,500,000%. Yes, percent! 1,500,000% is equivalent to the token rising by a factor of 15,000 times in a year! Now that’s just unbelievable, (you’re probably thinking) and you need to sell all your assets and get in on it now, before it’s all too late and there’s nothing left to share!
Anyone who did have even the slightest thought, I’m sorry, but you’re probably N.G.M.I. With DeFi now entering its second phase — where many brilliant minds are working to develop the next grounding and disruptive technology — the party seems to be just getting started.
Other than the “centralized” nature of their “Risk Free Value Special Treasury” Titano’s founders are actually putting in a solid effort to keep the TITANO protocol alive and running, so hats off to David and his team of superstars. Now let’s move onto Safuu…
Safuu sprung onto the scene just recently but has taken the high APY project community by storm. It has almost instantly catapulted to become the de-facto face of such projects, so we wanted to find out why. After all, there are countless other projects which are offering similar APY’s and rebase frequencies as Safuu but how come it is Safuu that are stealing the spotlight?
So to put our money where our mouth is, we decided to take a small four- figure position in the Safuu token. With a 14% tax on token purchases, our US$2,000 got us just under US$1,740 worth of Safuu. We didn’t bat an eyelid about the considerably high tax, because heck, they’re offering a 383,025.8% APY. So theoretically, our US$2,000 investment, if left with them for one year, should be equivalent to $3,830,258? Sounds almost too good to be true…
Despite this, we wanted to go for the big win so we aped in anyway. The first thing most people do before parting with any hard-earned dollars is to try and vet the project, right? D.Y.O.R.?
Upon entering Safuu’s Discord, it was evident that inviting users — particularly with a link — was a big NO-NO. We never intended to join the Discord to spruik for new users anyway. So while on our best behaviour, we found that Safuu — much like Titano — also has a similar buy-back function, which they have named the Safuu Insurance Fund (SIF). Much like Titano’s LRF, the SIF’s role is to simply buy back their tokens and burn them if the liquidity-backed reserves fall below 100%. That’s according to their ‘whitepaper’.
When we entered the Safuu dashboard and noticed a brilliantly rounded-up figure of 100%, we wanted to know what this meant. The 100% figure is displayed under the heading “Backed Liquidity”. O.K. So if the role of the SIF is to buy-back tokens for burning, then surely this must be correct? Well, that’s what we thought.
By comparing various other “Titano forks” we were able to work out the formula which gave the Backed Liquidity its value. It is calculated by Total value of treasury / total value of bnb in liquidity pool
SIF + Market Value of Treasury) / Liquidity Pool Value
At the time of writing, we calculated the Backed Liquidity Value:
$3,355,943 + $1,455,042 / $18,021,615 = 26.7%.
Since making our modest US$2,000 investment into the Safuu protocol, it was actually increased by just over 20% which is very impressive, since it has only been approximately three weeks since we participated. But wait! If the liquidity-backed value is really only 26.7%, it seems that the 100% metric on the dashboard was a mere static display which would never change.🚨
When questioned about the liquidity-backed price, the mods (with actually half-decent English) became very defensive, stating that the protocol had other treasury funds as well. However, the treasury funds they use to defend this value have already been included in our calculation that gives the backed price of 26.7%.
So basically if we’re interpreting this correctly, the Safuu tokens which we hold, 15.62097 in total, are really only intrinsically worth 15.62097 * 26% = 4.0614522. Therefore “Your Balance” (which we believed the Safuu tokens were worth) are actually only worth US$681.6966.
It will probably make more sense when we look into the ways in which the Safuu treasury wallet has been quite busy sending huge sums of BNB to a Binance wallet, probably to go farming?
Who knows? Anyway, who gives a fork?
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